The government said Tuesday it will buy a plot of land where President Lee Myung-bak once sought to build his retirement home, raising suspicions it might be intended to offset losses for the land's co-owner who is the president's son.

According to the finance ministry, the government decided to purchase the 463-square-meter plot in Naegok-dong on the southern edge of Seoul at the previous acquisition cost of 1.12 billion won ($1 million).

The ministry explained the move is intended to maximize utilization of the land by removing the hindrance caused by its joint ownership between the government and a private individual.

The land, however, is part of the site that has been the focus of a scandal that broke out last year after it was revealed that the land was purchased jointly by the president's 34-year-old son, Si-hyung, and the presidential security service team, to build Lee's retirement home.

The cost was not shared evenly between the two sides, with critics saying the security service team paid more, in what they claim was a scheme to allow the son to profit from buying the site at a below-market price.

The presidential office has flatly rejected such suspicions but the president later scrapped his plan to build his retirement home there and recently endorsed a parliamentary motion authorizing an independent investigation into suspicions surrounding the project.

Critics say that the government's decision to purchase the controversial land might be intended to offset possible losses from recent price falls in the area, which has been hit by the prolonged property market slump and stagnant transactions. (Yonhap News)